India's Chief Economic Advisor, V Anantha Nageswaran, delivered a speech at the Global Economic Policy Forum 2024 calling for balanced cryptocurrency regulation. He also stressed that innovation should not be stopped altogether.
However, it still has to be made in such a way that it corresponds to the requirements of society, including the level of financial literacy in the country. This position arrives at a time when India has yet to establish clear definitions in legal frameworks that govern the use of cryptocurrencies, a sector that continues to grow rapidly and attract many investors.
Nageswaran added that such innovations have to be visible and should benefit society. He noted that regulators should publicly report their actions and the reasons for those actions. This approach responsibly fosters the new sector's growth and benefits the general population.
Indian regulators need clarity on their stand as the cryptocurrency market grows. Additionally, the Reserve Bank of India has opposed cryptocurrencies, noting threats to its financial stability. However, the country has seen a surge in crypto adoption. Such growth indicates the need to make distinctions that do not hamper technological advancement but will protect investors.
An anticipated policy paper on the current legal status of cryptocurrencies operating in India has been postponed. Meanwhile, the government's attention has shifted towards enhancing and experimenting with the digital rupee. These developments occur in discussions about assessing the social impact and return on innovations such as cryptocurrencies and internet games.
The Chief Economic Advisor's comments highlight a crucial balancing act for regulators: encourage innovation while providing safety and accountability. By promoting transparent regulatory frameworks and being mindful of societal impacts, India gives the impression of being a careful but pro-crypto country.